Japan's new finance minister Kan says weaker yen preferable+

TOKYO, Jan. 7 Kyodo - Japan's new Finance Minister Naoto Kan said Thursday he is hoping that the yen will weaken from the current level to help the economy recover.

''Currently, the trend has been corrected a lot toward yen weakness since
around the time of the Dubai shock, but I hope it will correct a bit more,''
Kan said in his inaugural news conference at the ministry.
''I will make efforts, including working together with the Bank of Japan, to
get the yen to appropriate levels while considering various effects on the
economy that may be caused by currencies,'' Kan said.
He said that many Japanese companies think it would be ideal for the Japanese
currency to be around 95 yen to the U.S. dollar for trade.
It is rare for a Cabinet member to make comments on foreign-exchange levels.
Shortly after Kan's remarks, the dollar jumped more than a half a yen to reach
the day's high in the upper 92 yen range.
A weaker yen increases Japanese firms' global competitiveness and repatriated
overseas profits.
The dollar hit a 14-year low in the 84 yen range in late November, triggered by
fears of a debt default in Dubai.
Kan, also deputy prime minister, replaced Hirohisa Fujii whose resignation for
health reasons was officially approved by the government Thursday.
Kan's stance on currencies appears to differ from his 77-year-old predecessor,
whose repeated comments during a nearly four-month tenure were taken by the
market as suggesting Japan's reluctance to intervene, contributing to the yen's
appreciation last year.
The appointment of Kan, who has not had much experience in financial affairs in
his long political career, comes at a time when the nation's economy is
struggling not to slip into a deeper recession amid deflation, falling
household income and the ballooning public debt.
Kan said the government will try to avoid the nation's economy falling into a
double-dip recession by making sure to get the second extra budget for fiscal
2009 and the budget for the year starting in April passed in the upcoming Diet
session, scheduled to begin Jan. 18.
He also said ensuring growth and cutting wasteful spending should come before
raising consumption and other taxes to help rebuild the nation's worsening
fiscal health.
The 63-year-old new minister said one of his major tasks will be to make the
Finance Ministry more transparent to the public in terms of its operations and
use of the budget.
He said it would be important not only to craft the right kind of state budget
but also to follow up and see whether the budget has been used in an effective
manner.
''Before representing the ministry, I will be a representative of the public,''
Kan said.
Earlier in the day, Kan said he wanted to change Japan through the ministry,
considering that it has played the most ''symbolic role both in a good sense
and bad sense'' in the nation's powerful bureaucratic system.
''If there is any hidden chest (in the ministry), I want to open it,'' Kan told
reporters in front of his residence in Tokyo, referring to untapped reserves
amassed in special accounts, despite fiscal constraints.
Still, he said at the news conference, it is necessary to keep in mind that the
availability of such money is limited when drawing up budgets in the years
ahead.
To raise money for key polices of the Democratic Party of Japan-led government,
he said the ongoing goal of overhauling the nation's overall budget should be
prioritized.
Asked whether he will take part in a Group of Seven meeting of finance
ministers and central bank governors early next month in Canada, Kan said, ''If
necessary, I will attend. But due to the schedule of Diet sessions, I can't say
anything concrete.''
Currency issues are normally discussed at a meeting of the G-7, which groups
Britain, Canada, France, Germany, Italy, Japan and the United States.
==Kyodo